Scott Technology lifts first half operating profit, dividend

Scott Technology chief executive John Kippenberger. Photo / Supplied

Automation and robotics company Scott Technology produced a net profit of $4.7 million in the first half - unchanged from the previous corresponding period - but said improved revenue drove a lift in its operating earnings.

Scott said there had been year-on-year increases in revenue and ebitda despite disruption from the external factors of Covid-19, the global supply chain crisis and geopolitical unrest.

Continuing demand for automation drove revenue up 13 per cent to $118.4m and grew normalised ebitda by 19 per cent to $11.7m.

Forward work remained robust with system design and build contracts in Europe, United States, China and Australasia and continuing growth in product and service categories.

Dunedin-based Scott declared a 4.0 cents per share dividend, up from last year's interim dividend of 2c.

The capability of the business continued to grow as the second year of its "Scott 2025" strategy neared its end.

Targeted sales prospecting had generated significant systems contracts across meat processing, materials handling and appliances.

Forward work programmes in Europe, the United States, China and Australasia remained elevated as new system design and build contracts have been awarded at a "steady and deliberate" rate in the first half.

Investment in the high-margin product and service businesses had underpinned the strong first-half performance.

Service revenues across most key markets grew due to strategic investment in people capability as well as deeper parts inventories.

The higher revenue converted to a margin percentage only slightly down on the prior half year at 22 per cent, despite inflationary pressure on labour and materials due to Covid-19 and the effects of the global supply chain crisis.

Scott said its teams were well versed in mitigating the issues resulting from Covid-19.

"The good news is we are continuing to see a return to more normal conditions as the peak of the most recent wave passes in most parts of the world," chief executive John Kippenberger said.

The ongoing disruption to global supply chains continues to create a moderate source of pressure on Scott's project, product and service supply.

At the time of Russia's invasion of Ukraine, Scott Europe was in the process of building two conveying and palletising systems for large global food companies into their Russian operations.

Scott said it was in discussions with both companies to re-purpose this equipment into other European operations.

The company's shares last traded at $3.20, down 5c from Wednesday's close.

The stock has gained 56 per cent over the past 12 months.